Sterling Energy, the upstream oil and gas company listed with operations in Iraqi Kurdistan, has announced its annual results for 2010.
- Sangaw North-1 exploration well testing the potential of the Sangaw North block.
- Received $15.6 million of net cash flow from Chinguetti field operations during 2010 (2009: $13.3 million).
- Cash resources as at 31 December 2010 $111.7 million including partner funds (2009: $113.9 million).
- Company remains debt free.
During 2010 Sterling's primary focus was the drilling activity at Sangaw North-1; an exploration well testing a large prospective structure in the Kurdistan autonomous region of Iraq. We have encountered many geological and mechanical challenges while drilling this well, however the expertise of our drilling team, with the support of our joint venture partners, has meant we could continue operations in a safe and controlled manner, albeit at a slower overall pace. The delay to the drilling program caused by the geological and mechanical events was further extended by the 'crowning incident' on the rig caused by the rig contractor. However frustrating these delays may be, the financial impact for Sterling has been mitigated as our drilling costs for Sangaw North-1 well are carried by Addax. I thank all the stakeholders in the Sangaw North project for their assistance and support during a very exciting and challenging drilling operation.
As a result of the re-structuring undertaken at the end of 2009, the Company remains in a very strong financial position with some $101.6 million of own funds at the end of 2010; our approved work programme for 2011 is fully funded and we have funds available for new venture activity. As an explorer without significant production we generally fund our day to day activities from our cash resource; our $15.6 million of net cash flow during 2010 from the Chinguetti field operation in Mauritania exceeded our general overhead costs and made a significant contribution towards our cost of operations.
Board and management changes
On 9 November 2010 Angus MacAskill was appointed as Sterling's Chief Executive Officer and a Director; Angus has some 30 years of hands-on experience covering many aspects of exploration, development and production activity and thus the management of Sterling's field operations is now one of his direct responsibilities. On 15 November 2010, Malcolm Pattinson was appointed a non-executive Director; Malcolm has spent most of his career as a geo-scientist and his experience will greatly assist in our new venture activity. On 31 December 2010, Richard Stabbins stepped down as a non-executive Director; we thank Richard for his contribution over the years and wish him well in his retirement.
Outlook for 2011 and beyond